<PAGE>

                                                                      Exhibit 13

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
--------------------------------------------------------------------------------

GENERAL

Pamrapo Bancorp, Inc. (the "Company") owns 100% of the issued and outstanding
stock of Pamrapo Savings Bank, SLA (the "Bank"), which is the primary asset of
the Company. The Company's business is conducted principally through the Bank.

BUSINESS OF THE COMPANY

The Bank's principal business has been and continues to be attracting retail
deposits from the general public and investing those deposits, together with
funds generated from operations, primarily in one-to-four family, owner occupied
residential mortgage loans. In addition, in times of low loan demand, the Bank
will invest in mortgage-backed securities to supplement its lending portfolio.
The Bank also invests, to a lesser extent, in multi-family residential mortgage
loans, commercial real estate loans, home equity and second mortgage loans and
consumer loans.

The earnings of the Bank depend primarily upon the level of net interest income,
which is the difference between the interest earned on assets such as loans,
mortgage-backed securities, investments and other interest-earning assets and
the interest paid on liabilities such as deposits and borrowings. Net interest
income is affected by many factors, including regulatory, economic and
competitive factors that influence interest rates, loan demand and deposit flow.
Net interest income is also affected by the amount, composition and relative
interest rates of the Bank's assets and liabilities and by the repricing of such
assets and liabilities. The Bank is vulnerable to interest rate fluctuations to
the extent that its interest-bearing liabilities mature or reprice more rapidly
than its interest-earning assets. Such asset/liability structure may result in
lower net interest income during periods of rising interest rates and may be
beneficial in times of declining interest rates. The Bank's net income is also
affected by provisions for loan losses, non-interest income, non-interest
expenses and income taxes.

FINANCIAL CONDITION

The Company's consolidated assets at December 31, 2003 totaled $636.9 million,
which represents an increase of $48.2 million or 8.19% when compared to $588.7
million at December 31, 2002, primarily due to an increase in mortgage-backed
securities.

Securities available for sale decreased $621,000 or 13.67% to $3.9 million at
December 31, 2003 when compared to $4.5 million at December 31, 2002. The
decrease during the year ended December 31, 2003, resulted primarily from
proceeds from repayments on securities available for sale amounting to $652,000
which offset purchases of securities available for sale of $32,000. Investment
securities held to maturity increased $2.3 million or 32.39% to $9.4 million at
December 31, 2003 when compared to $7.1 million at December 31, 2002. The
increase during the year ended December 31, 2003 resulted primarily from
purchases of investment securities held to maturity of $2.4 million.

Mortgage-backed securities held to maturity increased $72.3 million or 49.49% to
$218.4 million at December 31, 2003 from $146.1 million at December 31, 2002.
The increase during the year ended December 31, 2003 resulted primarily from
purchases of mortgage-backed securities of $160.9 million, sufficient to offset
principal repayments of $87.9 million on mortgage-backed securities.

Net loans amounted to $378.6 million and $389.9 million at December 31, 2003 and
2002, respectively, which represents a decrease of $11.3 million or 2.90%,
primarily due to loan repayments exceeding loan originations by $10.9 million.

Total deposits at December 31, 2003 increased $46.7 million or 10.48% to $492.2
million compared to $445.5 million at December 31, 2002.

Advances from the Federal Home Loan Bank of New York ("FHLB-NY") totaled $87.0
million and $84.3 million at December 31, 2003 and 2002, respectively. The net
increase of $2.7 million during the year ended December 31, 2003, resulted from
new advances from the FHLB-NY, which were used to fund loan commitments,
purchase of mortgage-backed securities and for general corporate purposes.

Stockholders' equity amounted to $51.3 million and $50.8 million at December 31,
2003 and 2002, respectively. During the years ended December 31, 2003 and 2002,
net income of $7.8 million and $7.1 million, respectively, was recorded and cash
dividends of $4.0 million and $3.9 million, respectively, were paid on the
Company's common stock. During the years ended December 31, 2003 and 2002, the
Company repurchased 174,673 and 20,600 shares, respectively, of its common stock
for $3.2 million and $279,000, respectively, under a stock repurchase program.

                                                                               9

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
--------------------------------------------------------------------------------

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

NET INCOME

Net income increased by $658,000 or 9.24% to $7.8 million during the year ended
December 31, 2003 compared to $7.1 million for the year ended December 31, 2002.
The increase in net income during the 2003 period was primarily due to decreases
in total interest expense of $1.9 million and provision for loan losses of
$550,000, which more than offset decreases in total interest income of $1.3
million and non-interest income of $11,000, along with increases in non-interest
expense of $18,000 and income taxes of $417,000.

INTEREST INCOME

Interest income on loans during the year ended December 31, 2003 decreased by
$3.2 million or 10.92% to $26.1 million when compared to $29.3 million during
2002. During the years ended December 31, 2003 and 2002, the yield earned on the
loan portfolio was 6.94% and 7.61%, respectively. The average balance of loans
outstanding during the years ended December 31, 2003 and 2002, totaled $376.0
million and $384.7 million, respectively.

Interest on mortgage-backed securities increased $1.8 million or 23.08% during
the year ended December 31, 2003 to $9.6 million compared to $7.8 million for
2002. During the years ended December 31, 2003 and 2002, the average balance of
mortgage-backed securities totaled $199.6 million and $127.7 million,
respectively, resulting in a net increase of $71.9 million or 56.30%. The yield
earned on the mortgage-backed securities portfolio was 4.80% and 6.08% during
2003 and 2002, respectively.

Interest earned on investment securities increased by $219,000 or 42.28% to
$737,000 for the year ended December 31, 2003, when compared to $518,000 for
2002. The increase during the year ended December 31, 2003, resulted from an
increase of $3.3 million or 45.83% in the average balance of the investment
securities portfolio, sufficient to offset a decrease of twenty-three basis
points in the yield earned on the investment securities portfolio from 7.23% in
2002 to 7.00% in 2003.

Interest on other interest-earning assets amounted to $346,000 and $508,000
during the years ended December 31, 2003 and 2002, respectively. The average
balance of other interest-earning assets outstanding decreased $7.0 million or
27.45% to $18.5 million in 2003 from $25.5 million in 2002, along with a
decrease of twelve basis points in the yield earned on other interest-earning
assets to 1.87% in 2003 from 1.99% in 2002.

INTEREST EXPENSE

Interest on deposits decreased $1.8 million or 15.65% to $9.7 million during the
year ended December 31, 2003 compared to $11.5 million for 2002. The decrease
during 2003 was attributable to a decrease of sixty-nine basis points in the
Bank's average cost of interest-bearing deposits to 2.17% for 2003 from 2.86%
for 2002 partially offset by an increase of $44.3 million or 11.04% in the
average balance of interest-bearing deposits outstanding.

Interest on advances and other borrowed money decreased $65,000 or 1.71% to $3.7
million during the year ended December 31, 2003 compared to $3.8 million for
2002. The decrease during 2003 was attributable to a decrease of eighty-nine
basis points in the Bank's cost of borrowings from 5.04% for 2002 to 4.15% for
2003, sufficient to offset an increase of $14.7 million or 19.47% in the average
balance of advances and other borrowed money from $75.5 million in 2002 to $90.2
million in 2003.

NET INTEREST INCOME

Net interest income for the year ended December 31, 2003, increased $554,000 or
2.43% to $23.3 million for 2003 as compared to $22.8 million for 2002. The
Bank's net interest rate spread decreased from 3.77% in 2002 to 3.57% in 2003
and its interest rate margin decreased from 4.18% in 2002 to 3.86% in 2003. The
decrease in net interest rate spread primarily resulted from a ninety basis
point decrease in the yield on interest-earning assets from 6.98% in 2002 to
6.08% in 2003, sufficient to offset a seventy basis point decrease in the cost
of average interest-bearing liabilities from 3.21% in 2002 to 2.51% in 2003.

PROVISION FOR LOAN LOSSES

During the years ended December 31, 2003 and 2002, the Bank provided $84,000 and
$634,000, respectively, for loan losses. At December 31, 2003 and 2002, the
Bank's loan portfolio included loans totaling $1.6 million and $2.7 million,
respectively, which were delinquent ninety days or more. The Bank maintains an
allowance for loan losses based on management's evaluation of the risk inherent
in its loan portfolio which gives due consideration to changes in general market
conditions and in the nature and volume of the Bank's loan activity. The
allowance for loan losses amounted to $2.52 million at December 31, 2003,
representing .65% of total loans and 161.53% of loans delinquent ninety days or
more compared to an allowance of $2.55 million at December

10

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------

31, 2002, representing .65% of total loans and 94.41% of loans delinquent ninety
days or more. During the years ended December 31, 2003 and 2002, the Bank
charged off loans aggregating $126,000 and $244,000, respectively. The Bank
monitors its loan portfolio and intends to continue to provide for loan losses
based on its ongoing periodic review of the loan portfolio and general market
conditions.

NON-INTEREST INCOME

Non-interest income decreased by $11,000 or 0.43% to $2.56 million during the
year ended December 31, 2003 as compared to $2.57 million for 2002. The decrease
in non-interest income during 2003 resulted primarily from a decrease in the
gain on sale of branches of $479,000, sufficient to offset increases in fees and
service charges of $179,000 and miscellaneous income of $288,000. During the
year ended December 31, 2002, the Bank sold deposits of $21.8 million,
furniture, fixtures and leasehold improvements of $221,000 and account loans of
$148,000 at its two Brick, New Jersey, branch offices to another financial
institution. As a result of the sale, the Bank recognized a net gain of
$479,000.

NON-INTEREST EXPENSES

Non-interest expenses increased $18,000 to $12.81 million during the year ended
December 31, 2003 compared to $12.79 million for 2002. Salaries and employee
benefits, occupancy and advertising decreased $467,000, $51,000 and $36,000,
respectively, during the year ended December 31, 2003, which were more than
offset by increases in equipment and miscellaneous expenses of $87,000 and
$486,000, respectively.

INCOME TAXES

Income tax expense totaled $5.2 million and $4.8 million during the years ended
December 31, 2003 and 2002, respectively. The increase in 2003 resulted
primarily from an increase in pre-tax income of $1.1 million.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

NET INCOME

Net income increased by $2.1 million or 42.00% to $7.1 million during the year
ended December 31, 2002 compared to $5.0 million for the year ended December 31,
2001. The increase in net income during the 2002 period was primarily due to
increases in total interest income of $1.4 million and in non-interest income of
$645,000, along with a decrease in total interest expense of $2.3 million, which
more than offset increases in non-interest expense of $157,000, provision for
loan losses of $175,000 and income taxes of $1.9 million.

INTEREST INCOME

Interest income on loans during the year ended December 31, 2002 increased by
$1.8 million or 6.55% to $29.3 million when compared to $27.5 million during
2001. During the years ended December 31, 2002 and 2001, the yield earned on the
loan portfolio was 7.61% and 8.07%, respectively. The average balance of loans
outstanding during the years ended December 31, 2002 and 2001, totaled $384.7
million and $340.3 million, respectively, representing an increase of $44.4
million or 13.05%.

Interest on mortgage-backed securities decreased $160,000 or 2.02% during the
year ended December 31, 2002 to $7.8 million compared to $7.9 million for 2001.
During the years ended December 31, 2002 and 2001, the average balance of
mortgage-backed securities totaled $127.7 million and $121.6 million,
respectively, resulting in a net increase of $6.1 million or 5.02%. The yield
earned on the mortgage-backed securities portfolio was 6.08% and 6.52% during
2002 and 2001, respectively. Interest earned on investment securities decreased
by $78,000 or 13.09% to $518,000 for the year ended December 31, 2002, when
compared to $596,000 for 2001. The decrease during the year ended December 31,
2002, resulted from a decrease of $1.7 million or 18.97% in the average balance
of the investment securities portfolio, sufficient to offset an increase of
forty-eight basis points in the yield earned on the investment securities
portfolio from 6.75% in 2001 to 7.23% in 2002.

Interest on other interest-earning assets amounted to $508,000 and $623,000
during the years ended December 31, 2002 and 2001, respectively. The average
balance of other interest-earning assets outstanding increased $13.7 million or
116.10% to $25.5 million in 2002 from $11.8 million in 2001, sufficient to
offset a decrease of 327 basis points in the yield earned on other
interest-earning assets to 1.99% in 2002 from 5.26% in 2001.

INTEREST EXPENSE

Interest on deposits decreased $3.4 million or 22.82% to $11.5 million during
the year ended December 31, 2002 compared to $14.9 million for 2001. The
decrease during 2002 was attributable to a decrease of 105 basis points in the
Bank's average cost of interest-bearing

                                                                              11

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
--------------------------------------------------------------------------------

deposits to 2.86% for 2002 from 3.91% for 2001 partially offset by an increase
of $19.9 million or 5.22% in the average balance of interest-bearing deposits
outstanding.

Interest on advances and other borrowed money increased $1.2 million or 46.15%
to $3.8 million during the year ended December 31, 2002 compared to $2.6 million
for 2001. The increase during 2002 was attributable to an increase of $30.0
million or 65.81% in the average balance of advances and other borrowings
outstanding, partially offset by a decrease of seventy-five basis points in the
Bank's cost of borrowings from 5.79% for 2001 to 5.04% for 2002.

NET INTEREST INCOME

Net interest income for the year ended December 31, 2002, increased $3.7 million
or 19.37% to $22.8 million for 2002 as compared to $19.1 million for 2001. The
Bank's net interest rate spread increased from 3.48% in 2001 to 3.77% in 2002
and its interest rate margin increased from 3.95% in 2001 to 4.18% in 2002. The
increase in net interest rate spread primarily resulted from a ninety basis
point decrease in the cost of average interest-bearing liabilities to 3.21% in
2002 from 4.11% in 2001, sufficient to offset a sixty-one basis point decrease
in the yield on interest-earning assets from 7.59% in 2001 to 6.98% in 2002.

PROVISION FOR LOAN LOSSES

During the years ended December 31, 2002 and 2001, the Bank provided $634,000
and $459,000, respectively, for loan losses. At December 31, 2002 and 2001, the
Bank's loan portfolio included loans totaling $2.7 million and $3.3 million,
respectively, which were delinquent ninety days or more.

The Bank maintains an allowance for loan losses based on management's evaluation
of the risk inherent in its loan portfolio which gives due consideration to
changes in general market conditions and in the nature and volume of the Bank's
loan activity. The allowance for loan losses amounted to $2.55 million at
December 31, 2002, representing .65% of total loans and 94.41% of loans
delinquent ninety days or more compared to an allowance of $2.15 million at
December 31, 2001, representing .57% of total loans and 65.95% of loans
delinquent ninety days or more. During the years ended December 31, 2002 and
2001, the Bank charged off loans aggregating $244,000 and $273,000,
respectively. The Bank monitors its loan portfolio and intends to continue to
provide for loan losses based on its ongoing periodic review of the loan
portfolio and general market conditions.

NON-INTEREST INCOME

Non-interest income increased by $645,000 or 33.58% to $2.6 million during the
year ended December 31, 2002 as compared to $1.9 million for 2001. The increase
in non-interest income during 2002 resulted primarily from increases in fees and
service charges of $85,000, gain on sale of branches of $479,000 and
miscellaneous income of $81,000. During the year ended December 31, 2002, the
Bank sold deposits of $21.8 million, furniture, fixtures and leasehold
improvements of $221,000 and account loans of $148,000 at its two Brick, New
Jersey, branch offices to another financial institution. As a result of the
sale, the Bank recognized a net gain of $479,000.

NON-INTEREST EXPENSES

Non-interest expenses increased $156,000 to $12.8 million during the year ended
December 31, 2002 compared to $12.6 million for 2001. Occupancy, federal
insurance premium, advertising, equipment and miscellaneous expenses decreased
$121,000, $1,000, $53,000, $72,000 and $401,000, respectively, during the year
ended December 31, 2002, which were more than offset by increases in salaries
and employee benefits of $804,000.

INCOME TAXES

Income tax expense totaled $4.8 million and $2.9 million during the years ended
December 31, 2002 and 2001, respectively. The increase in 2002 resulted
primarily from increases in pre-tax income of $4.0 million and an increase in
the New Jersey income tax rate from 3% to 9% as a result of a tax law change.

LIQUIDITY AND CAPITAL RESOURCES

The Bank's primary sources of funds are deposits, amortization and prepayments
of loan and mortgage-backed securities principal, FHLB-NY advances, maturities
of investment securities and funds provided from operations. While scheduled
loan and mortgage-backed securities amortization and maturities of investment
securities are a relatively predictable source of funds, deposit flows and loan
and mortgage-backed securities prepayments are greatly influenced by market
interest rates, economic conditions and competition.

The Bank is required to maintain sufficient liquidity to ensure its safe and
sound operation by the Office of Thrift Supervision ("OTS") regulations. The
Bank adjusts its liquidity levels in order to meet funding needs for deposit
outflows, payments of real estate taxes from escrow accounts on mortgage loans,
repayment of borrowings, when applicable, and loan funding

12

<PAGE>

--------------------------------------------------------------------------------

commitments. The Bank also adjusts its liquidity level as appropriate to meet
its asset/liability objectives. In addition, the Bank invests its excess funds
in federal funds and interest-bearing deposits with the FHLB-NY, which provides
liquidity to meet lending requirements.

The Bank's liquidity, represented by cash and cash equivalents, is a product of
its operating, investing and financing activities. Cash was generated by
operating activities in each of the above periods. The primary source of cash
from operating activities during each period was net income.

The primary sources of investing activities of the Bank are lending and
investment in mortgage-backed securities. In addition to funding new loan
production and the purchase of mortgage-backed securities through operations and
financing activities, new loan production and purchases of mortgage-backed
securities were also funded by principal repayments on existing loans and
mortgage-backed securities. The primary sources of financing activities during
the 2003 period were net increases in deposits of $46.7 million and net advances
from the FHLB-NY of $2.7 million.

Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally invested in short-term investments,
such as federal funds and interest-bearing deposits. If the Bank requires funds
beyond its ability to generate them internally, borrowing agreements exist with
the FHLB-NY, which provide an additional source of funds. At December 31, 2003
and 2002, advances from the FHLB-NY amounted to $87.0 million and $84.3 million,
respectively.

The Bank anticipates that it will have sufficient funds available to meet its
current loan commitments. At December 31, 2003, the Bank had outstanding
commitments to originate loans and fund unused credit lines of $29.6 million.
Certificates of deposit scheduled to mature in one year or less, at December 31,
2003, totaled $175.9 million. Management believes that, based upon historical
experience, a significant portion of such deposits will remain with the Bank.

At December 31, 2003, the Bank exceeded each of the three OTS capital
requirements. The Bank's tangible, core and risk-based capital ratios were
7.26%, 7.26% and 15.13%, respectively. The Bank was categorized as
"well-capitalized" under the prompt corrective action regulations of the OTS.

IMPACT OF INFLATION AND CHANGING PRICES

The consolidated financial statements and the related data presented herein have
been prepared in accordance with accounting principles generally accepted in the
United States of America, which require the measurement of financial position
and operating results in terms of historical dollars, without considering
changes in the relative purchasing power of money over time due to inflation.

Unlike most industrial companies, virtually all of the assets and liabilities of
the Bank are monetary in nature. As a result, interest rates have a more
significant impact on the Bank's performance than the effects of general levels
of inflation. Interest rates do not necessarily move in the same direction or in
the same magnitude as the prices of goods and services because such prices are
affected by inflation to a larger extent than interest rates.

                                                                              13

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                      ----------------------------------
Assets                                                     Note(s)          2002             2003
--------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>               <C>
Cash and amounts due from depository institutions                     $      6,172,543  $      5,929,784
Interest-bearing deposits in other banks                                    17,684,844         4,196,698
--------------------------------------------------------------------------------------------------------
   Total cash and cash equivalents                        1 and 15          23,857,387        10,126,482
Securities available for sale                           1,2,9 and 15         4,542,528         3,921,902
Investment securities held to maturity                  1,3,9 and 15         7,095,209         9,422,111
Mortgage-backed securities held to maturity             1,4,9 and 15       146,138,326       218,418,340
Loans receivable                                        1,5,9 and 15       389,864,704       378,640,773
Foreclosed real estate                                        1                155,340                --
Investment in real estate                                     1                213,643           129,640
Premises and equipment                                   1,6 and 10          4,417,239         4,092,683
Federal Home Loan Bank of New York stock                      9              4,403,400         4,743,900
Interest receivable                                      1,7 and 15          2,982,315         2,838,497
Deferred tax asset                                        1 and 13             779,394           843,543
Other assets                                                  12             4,209,460         3,717,310
--------------------------------------------------------------------------------------------------------
      Total assets                                                    $    588,658,945  $    636,895,181
--------------------------------------------------------------------------------------------------------
Liabilities and stockholders' equity
--------------------------------------------------------------------------------------------------------
Liabilities
--------------------------------------------------------------------------------------------------------
Deposits                                                  8 and 15    $    445,507,415  $    492,160,765
Advances from Federal Home Loan Bank of New York          9 and 15          84,340,000        87,000,000
Other borrowed money                                     10 and 15             149,166           117,748
Advance payments by borrowers for taxes and insurance                        3,835,862         3,495,739
Other liabilities                                             12             4,070,229         2,797,586
--------------------------------------------------------------------------------------------------------
      Total liabilities                                                    537,902,672       585,571,838
--------------------------------------------------------------------------------------------------------
Commitments and contingencies                            14 and 15                  --                --
Stockholders' equity                                    1, 11 and 13
--------------------------------------------------------------------------------------------------------
Preferred stock; authorized 3,000,000 shares; issued
 and outstanding - none                                                             --                --
Common stock; par value $.01; 7,000,000 shares (2002)
 and 25,000,000 shares (2003) authorized; 6,900,000
 shares issued; 5,145,986 shares (2002) and 4,974,313
 shares (2003) outstanding                                                      69,000            69,000
Paid-in capital in excess of par value                                      18,937,168        18,957,298
Retained earnings - substantially restricted                                50,889,220        54,621,926
Accumulated other comprehensive income - Unrealized
 gain on securities available for sale, net of
 income tax                                                                    242,546           243,170
Treasury stock, at cost; 1,754,014 shares (2002) and
 1,925,687 shares (2003)                                                   (19,381,661)      (22,568,051)
--------------------------------------------------------------------------------------------------------
      Total stockholders' equity                                            50,756,273        51,323,343
--------------------------------------------------------------------------------------------------------
      Total liabilities and stockholders' equity                      $    588,658,945  $    636,895,181
--------------------------------------------------------------------------------------------------------
</TABLE>

                                 See notes to consolidated financial statements.

14

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                       ----------------------------------------------------
                                                           Note(s)           2001              2002              2003
---------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>             <C>               <C>               <C>
Interest income:
   Loans                                                  1 and 5      $     27,480,276  $     29,266,901        26,102,108
   Mortgage-backed securities                                1                7,924,810         7,764,545         9,570,040
   Investments                                               1                  596,371           518,481           737,285
   Other interest-earning assets                                                623,336           508,158           346,011
---------------------------------------------------------------------------------------------------------------------------
      Total interest income                                                  36,624,793        38,058,085        36,755,444
---------------------------------------------------------------------------------------------------------------------------
Interest expense:
   Deposits                                                  8               14,908,910        11,482,660         9,691,521
   Advances and other borrowed money                                          2,635,383         3,807,006         3,741,656
---------------------------------------------------------------------------------------------------------------------------
      Total interest expense                                                 17,544,293        15,289,666        13,433,177
---------------------------------------------------------------------------------------------------------------------------
Net interest income                                                          19,080,500        22,768,419        23,322,267
Provision for loan losses                                 1 and 5               458,888           634,090            83,777
---------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses                          18,621,612        22,134,329        23,238,490
---------------------------------------------------------------------------------------------------------------------------
Non-interest income:
   Fees and service charges                                                   1,200,562         1,285,725         1,464,683
   Gain on sale of branches                                                          --           478,563                --
   Miscellaneous                                                                720,554           801,605         1,089,901
---------------------------------------------------------------------------------------------------------------------------
      Total non-interest income                                               1,921,116         2,565,893         2,554,584
---------------------------------------------------------------------------------------------------------------------------
Non-interest expenses:
   Salaries and employee benefits                           12                6,430,140         7,234,261         6,767,218
   Net occupancy expense of premises                      6 and 14            1,206,893         1,085,575         1,034,747
   Equipment                                                 6                1,354,638         1,282,556         1,369,764
   Advertising                                                                  233,745           181,207           144,744
   Federal insurance premium                                                     74,314            73,019            72,599
   Miscellaneous                                                              3,334,617         2,933,980         3,420,331
---------------------------------------------------------------------------------------------------------------------------
      Total non-interest expenses                                            12,634,347        12,790,598        12,809,403
---------------------------------------------------------------------------------------------------------------------------
Income before income taxes                                                    7,908,381        11,909,624        12,983,671
Income taxes                                              1 and 13            2,907,980         4,786,232         5,202,845
---------------------------------------------------------------------------------------------------------------------------
Net income                                                   1         $      5,000,401  $      7,123,392  $      7,780,826
---------------------------------------------------------------------------------------------------------------------------
Net income per common share:                                 1
   Basic                                                               $           0.97  $           1.39  $           1.54
---------------------------------------------------------------------------------------------------------------------------
   Diluted                                                             $           0.97  $           1.39  $           1.54
---------------------------------------------------------------------------------------------------------------------------
Weighted average number of common shares outstanding:        1
   Basic                                                                      5,160,346         5,141,486         5,055,816
---------------------------------------------------------------------------------------------------------------------------
   Diluted                                                                    5,160,346         5,141,486         5,061,471
---------------------------------------------------------------------------------------------------------------------------
Dividends per common share                                   1         $           0.72  $           0.75  $           0.80
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements.

                                                                              15

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  Year Ended December 31,
                                                       ----------------------------------------------
                                                            2001           2002            2003
-----------------------------------------------------------------------------------------------------
<S>                                                    <C>             <C>             <C>
Net income                                             $   5,000,401   $   7,123,392   $    7,780,826
-----------------------------------------------------------------------------------------------------
Other comprehensive income, net of income taxes:
   Gross unrealized holding gain on securities
    available for sale                                       191,091          97,762            1,024
   Deferred income taxes                                     (68,900)        (51,000)            (400)
-----------------------------------------------------------------------------------------------------
   Other comprehensive income                                122,191          46,762              624
-----------------------------------------------------------------------------------------------------
Comprehensive Income                                   $   5,122,592   $   7,170,154   $    7,781,450
-----------------------------------------------------------------------------------------------------
</TABLE>

                                 See notes to consolidated financial statements.

16

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                          Paid-in        Retained     Accumulated
                                                         Capital in      Earnings -      Other
                                                        Excess of Par  Substantially  Comprehensive    Treasury
                                          Common Stock     Value        Restricted        Income         Stock          Total
---------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>           <C>            <C>            <C>            <C>            <C>
Balance - December 31, 2000               $     34,500  $  18,906,768  $  46,332,436  $      73,593  $ (18,818,788) $  46,528,509
Net income for the year ended
 December 31, 2001                                  --             --      5,000,401             --             --      5,000,401
Purchase of treasury stock                          --             --             --             --       (416,145)      (416,145)
Unrealized gain on securities
 available for sale, net of income taxes            --             --             --        122,191             --        122,191
Cash dividends                                      --             --     (3,711,781)            --             --     (3,711,781)
---------------------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2001                     34,500     18,906,768     47,621,056        195,784    (19,234,933)    47,523,175
Net income for the year ended
 December 31, 2002                                  --             --      7,123,392             --             --      7,123,392
Stock split                                     34,500        (34,500)            --             --             --             --
Purchase of treasury stock                          --             --             --             --       (279,328)      (279,328)
Reissuance of treasury stock                        --         64,900             --             --        132,600        197,500
Unrealized gain on securities
 available for sale, net of income taxes            --             --             --         46,762             --         46,762
Cash dividends                                      --             --     (3,855,228)            --             --     (3,855,228)
---------------------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2002                     69,000     18,937,168     50,889,220        242,546    (19,381,661)    50,756,273
Net income for the year ended
 December 31, 2003                                  --             --      7,780,826             --             --      7,780,826
Purchase of treasury stock                          --             --             --             --     (3,221,490)    (3,221,490)
Sale of treasury stock                              --         20,130             --             --         35,100         55,230
Unrealized gain on securities
 available for sale, net of income taxes            --             --             --            624             --            624
Cash dividends                                      --             --     (4,048,120)            --             --     (4,048,120)
---------------------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2003               $     69,000  $  18,957,298  $  54,621,926  $     243,170  $ (22,568,051) $  51,323,343
=================================================================================================================================
</TABLE>

See notes to consolidated financial statements.

                                                                              17

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASHFLOWS

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                       --------------------------------------------------
                                                            2001             2002              2003
---------------------------------------------------------------------------------------------------------
<S>                                                    <C>              <C>               <C>
Cash flows from operating activities:
   Net income                                          $    5,000,401   $     7,123,392   $     7,780,826
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation of premises and equipment and
       investment in real estate                              584,996           619,262           553,622
      (Accretion) amortization of deferred fees,
       premiums and discounts, net                             (7,895)          128,086         1,037,197
      Provision for loan losses                               458,888           634,090            83,777
      Provision for losses on foreclosed real estate           20,037                --                --
      (Gain) on sales of foreclosed real estate               (34,359)           (8,349)          (17,362)
      (Gain) on sale of real estate held for
       investment                                                  --                --           (42,230)
      (Gain) on sale of branches                                   --          (478,563)               --
      Deferred income taxes                                   (26,319)          391,008           (64,549)
      (Increase) decrease in interest receivable             (178,242)          (38,089)          143,818
      (Increase) decrease in other assets                    (440,326)       (2,477,357)          492,150
      (Decrease) in other liabilities                        (805,963)         (423,935)       (1,272,643)
      Distribution of treasury stock                               --           197,500                --
---------------------------------------------------------------------------------------------------------
         Net cash provided by operating activities          4,571,218         5,667,045         8,694,606
---------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
   Principal repayments on securities available
    for sale                                                1,081,230           895,307           651,692
   Purchases of securities available for sale                (570,385)          (43,590)          (31,692)
   Purchases of investment securities held to
    maturity                                               (4,000,000)       (4,110,600)       (2,388,040)
   Proceeds from calls of investment securities
    held to maturity                                        6,000,000         2,000,000                --
   Principal repayments on mortgage-backed securities
    held to maturity                                       30,463,577        44,499,307        87,887,524
   Purchases of mortgage-backed securities held to
    maturity                                              (34,155,728)      (68,421,533)     (160,853,754)
   Proceeds from sales of student loans                            --           147,950                --
   Net change in loans receivable                         (60,394,792)      (21,311,805)       10,851,961
   Proceeds from sales of foreclosed real estate              335,017            91,150           172,702
   Additions to premises and equipment and investment
    in real estate                                           (359,171)         (413,813)         (225,433)
   Proceeds from sale of investment in real estate                 --                --           122,600
   Proceeds from sale of premises and equipment                    --           221,437                --
   Purchase of Federal Home Loan Bank of New York
    stock                                                    (299,900)         (607,300)         (340,500)
---------------------------------------------------------------------------------------------------------
         Net cash (used in) investing activities          (61,900,152)      (47,053,490)      (64,152,940)
---------------------------------------------------------------------------------------------------------
</TABLE>

                                 See notes to consolidated financial statements.

18

<PAGE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                       --------------------------------------------------
                                                            2001             2002              2003
---------------------------------------------------------------------------------------------------------
<S>                                                    <C>              <C>               <C>
Cash flows from financing activities:
   Net increase in deposits                            $   37,176,939   $    50,726,043   $    46,653,350
   Cash paid for sale of deposits                                  --       (21,326,860)               --
   Advances from Federal Home Loan Bank of New York        35,000,000        25,000,000        33,000,000
   Repayment of Advances from Federal Home Loan Bank
    of New York                                            (3,243,100)       (8,000,000)      (30,340,000)
   Net (decrease) in other borrowed money                     (26,786)          (29,010)          (31,418)
   Net increase (decrease) in payments by borrowers
    for taxes and insurance                                   984,838           319,330          (340,123)
   Cash dividends paid                                     (3,711,781)       (3,855,228)       (4,048,120)
   Sale of treasury stock                                          --                --            55,230
   Purchase of treasury stock                                (416,145)         (279,328)       (3,221,490)
---------------------------------------------------------------------------------------------------------
         Net cash provided by financing activities         65,763,965        42,554,947        41,727,429
---------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash
 equivalents                                                8,435,031         1,168,502       (13,730,905)
Cash and cash equivalents - beginning                      14,253,854        22,688,885        23,857,387
---------------------------------------------------------------------------------------------------------
Cash and cash equivalents - ending                     $   22,688,885  $     23,857,387  $     10,126,482
---------------------------------------------------------------------------------------------------------
Supplemental information:
   Transfer of loans receivable to foreclosed real
    estate                                             $       33,264  $             --  $             --
---------------------------------------------------------------------------------------------------------
   Loans to facilitate sales of foreclosed real
    estate                                             $       94,500  $             --  $             --
---------------------------------------------------------------------------------------------------------
   Cash paid during the period for:
      Income taxes                                     $    2,775,334  $      4,830,190  $      4,851,141
---------------------------------------------------------------------------------------------------------
      Interest on deposits and borrowings              $   17,551,080  $     15,348,766  $     13,514,822
---------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements.

                                                                              19

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidated financial statement presentation

The consolidated financial statements include the accounts of the Company, its
wholly owned subsidiary, Pamrapo Savings Bank, S.L.A. (the "Bank") and the
Bank's wholly owned subsidiary, Pamrapo Service Corp., Inc. (the "Service
Corp."). The Company's business is conducted principally through the Bank. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America
("GAAP"). In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the consolidated statement of financial
condition and revenues and expenses for the period then ended. Actual results
could differ significantly from those estimates. Material estimates that are
particularly susceptible to significant changes relate to the determination of
the allowance for loan losses, the assessment of prepayment risks associated
with mortgage-backed securities and the determination of the amount of deferred
tax assets which are more likely than not to be realized. Management believes
that the allowance for loan losses is adequate, prepayment risks associated with
mortgage-backed securities are properly recognized and all deferred tax assets
are more likely than not to be recognized. While management uses available
information to recognize losses on loans, future additions to the allowance for
loan losses may be necessary based on changes in economic conditions in the
market area. Additionally, assessments of prepayment risks related to
mortgage-backed securities are based upon current market conditions, which are
subject to frequent change. Finally, the determination of the amount of deferred
tax assets more likely than not to be realized is dependent on projections of
future earnings, which are subject to frequent change.

In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for loan losses.
Such agencies may require the Bank to recognize additions to the allowance for
loan losses based on their judgments about information available to them at the
time of their examination.

Cash and cash equivalents

Cash and cash equivalents include cash and amounts due from depository
institutions and interest-bearing deposits in other banks having original
maturities of three months or less.

Investment and mortgage-backed securities

Investments in debt securities that the enterprise has the positive intent and
ability to hold to maturity are classified as held-to-maturity securities and
reported at amortized cost. Debt and equity securities that are bought and held
principally for the purpose of selling them in the near term are classified as
trading securities and reported at fair value, with unrealized holding gains and
losses included in earnings. Debt and equity securities not classified as
trading securities nor as held-to-maturity securities are classified as
available for sale securities and reported at fair value, with unrealized
holding gains or losses, net of deferred income taxes, reported in a separate
component of stockholders' equity.

Premiums and discounts on all securities are amortized/accreted using the
interest method. Interest and dividend income on securities, which includes
amortization of premiums and accretion of discounts, is recognized in the
consolidated financial statements when earned. The adjusted cost basis of an
identified security sold or called is used for determining security gains and
losses recognized in the consolidated statements of income.

Loans receivable

Loans receivable are stated at unpaid principal balances, less the allowance for
loan losses and net deferred loan origination fees and discounts.

The Bank defers loan origination fees and certain direct loan origination costs
and amortizes/accretes such amounts as an adjustment of yield over the
contractual lives of the related loans. Discounts on loans purchased are
recognized as income by use of the level-yield method over the terms of the
respective loans.

Uncollectible interest on loans is charged off, or an allowance is established
based on management's evaluation. An allowance is established by a charge to
interest income equal to all interest previously accrued, and income is
subsequently recognized only to the extent that cash payments are received
until, in management's judgment, the borrower's ability to make periodic
interest and principal payments is probable, in which case the loan is returned
to an accrual status.

20

<PAGE>

Allowance for loan losses

An allowance for loan losses is maintained at a level considered adequate to
absorb loan losses. Management of the Bank, in determining the allowance for
loan losses, considers the risks inherent in its loan portfolio and changes in
the nature and volume of its loan activities, along with the general economic
and real estate market conditions.

The Bank utilizes a two tier approach: (1) identification of impaired loans and
the establishment of specific loss allowances, if necessary, on such loans; and
(2) establishment of general valuation allowances on the remainder of its loan
portfolio. The Bank maintains a loan review system which allows for a periodic
review of its loan portfolio and the early identification of potential impaired
loans. Such system takes into consideration, among other things, delinquency
status, size of loans, type of collateral and financial condition of the
borrowers. Specific loan loss allowances are established for identified loans
based on a review of such information and/or appraisals of the underlying
collateral. General loan loss allowances are based upon a combination of factors
including, but not limited to, actual loan loss experience, composition of loan
portfolio, current economic conditions and management's judgment.

Although management believes that adequate specific and general loan loss
allowances are established, actual losses are dependent upon future events and,
as such, further additions to the allowance for loan losses may be necessary.

An impaired loan is evaluated based on the present value of expected future cash
flows discounted at the loan's effective interest rate, or as a practical
expedient, at the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. A loan evaluated for impairment
is deemed to be impaired when, based on current information and events, it is
probable that the Bank will be unable to collect all amounts due according to
the contractual terms of the loan agreement. An insignificant payment delay,
which is defined as up to ninety days by the Bank, will not cause a loan to be
classified as impaired. A loan is not impaired during a period of delay in
payment if the Bank expects to collect all amounts due, including interest
accrued at the contractual interest rate for the period of delay. Thus, a demand
loan or other loan with no stated maturity is not impaired if the Bank expects
to collect all amounts due, including interest accrued at the contractual
interest rate, during the period the loan is outstanding. All loans identified
as impaired are evaluated independently. The Bank does not aggregate such loans
for evaluation purposes. Payments received on impaired loans are applied first
to accrued interest receivable and then to principal.

Foreclosed real estate and investment in real estate

Real estate acquired by foreclosure or deed in lieu of foreclosure is initially
recorded at the lower of cost or estimated fair value at date of acquisition and
subsequently carried at the lower of such initially recorded amount or estimated
fair value less estimated costs to sell. Costs incurred in developing or
preparing properties for sale are capitalized. Expenses of holding properties
and income from operating properties are recorded in operations as incurred or
earned. Gains and losses from sales of such properties are recognized as
incurred.

Real estate held for investment is carried at cost less accumulated
depreciation. Income and expense of operating the property are recorded in
operations.

Premises and equipment

Premises and equipment are comprised of land, at cost, and buildings, building
improvements, leaseholds and furnishings and equipment, at cost, less
accumulated depreciation and amortization. Significant renewals and betterments
are charged to the property and equipment account. Maintenance and repairs are
expensed in the year incurred. Rental income is netted against occupancy expense
in the consolidated statements of income.

Income taxes

The Company, Bank and Service Corp. file a consolidated federal income tax
return. Income taxes are allocated to the Company, Bank and Service Corp. based
on their respective income or loss included in the consolidated income tax
return. Separate state income tax returns are filed by the Company, Bank and
Service Corp.

Federal and state income taxes have been provided on the basis of reported
income. The amounts reflected on the Company's and subsidiaries' tax returns
differ from these provisions due principally to temporary differences in the
reporting of certain items for financial reporting and income tax reporting
purposes.

Deferred income tax expense or benefit is determined by recognizing deferred tax
assets and liabilities for the estimated future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in earnings in

                                                                              21

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

the period that includes the enactment date. The realization of deferred tax
assets is assessed and a valuation allowance provided, when necessary, for that
portion of the asset which is not likely to be realized. Management believes,
based upon current facts, that it is more likely than not that there will be
sufficient taxable income in future years to realize the deferred tax assets.

Interest-rate risk

The Bank is principally engaged in the business of attracting deposits from the
general public and using these deposits, together with borrowings and other
funds, to invest in securities, to make loans secured by real estate and, to a
lesser extent, make consumer loans. The potential for interest-rate risk exists
as a result of the generally shorter duration of the Bank's interest-sensitive
liabilities compared to the generally longer duration of its interest-sensitive
assets. In a rising interest rate environment, liabilities will reprice faster
than assets, thereby reducing net interest income. For this reason, management
regularly monitors the maturity structure of the Bank's assets and liabilities
in order to measure its level of interest-rate risk and to plan for future
volatility.

Disclosures about fair value of financial instruments

The following methods and assumptions were used in estimating the fair value of
its financial instruments:

Cash and cash equivalents and interest receivable: The carrying amounts reported
in the consolidated financial statements for cash and cash equivalents and
interest receivable approximate their fair values.

Securities: The fair value of securities, as well as commitments to purchase
securities, is determined by reference to quoted market prices, where available.
If quoted market prices are not available, fair values are based on quoted
market prices of comparable instruments.

Loans receivable: Fair value is estimated by discounting the future cash flows,
using the current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities, of such loans.

Deposits: The carrying amounts reported in the consolidated financial statements
for non-interest-bearing demand, NOW, Money Market, savings and club accounts
approximate their fair values. For fixed-maturity certificates of deposit, fair
value is estimated using the rates currently offered for deposits of similar
remaining maturities.

Advances from Federal Home Loan Bank of New York and other borrowed money: Fair
value is estimated using rates currently offered for liabilities of similar
remaining maturities, or when available, quoted market prices.

Commitments to extend credit: The fair value of commitments is estimated using
the fees currently charged to enter into similar agreements, taking into account
the remaining terms of the agreements and the present creditworthiness of the
counterparties. For fixed-rate loan commitments, fair value also considers the
difference between current levels of interest rates and the committed rates.

Stock-based compensation

The Company, under a plan approved by its stockholders in 2003, has granted
stock options to certain employees. See note 12 for additional information as to
option grants. The Company accounts for options granted using the intrinsic
value method, in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations. No
compensation expense has been reflected in net income for the options granted as
all such grants have an exercise price equal to the market price of the
underlying stock at the date of grant. The following table provides information
as to net income and earnings per share as if the Company had applied the fair
value recognition provisions of Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation," as amended, to all option
grants.

                                                                  Year Ended
                                                              December 31, 2003
-------------------------------------------------------------------------------
Net income as reported                                        $       7,780,826
   Total stock-based compensation expense, net of income
    taxes, included in reported net income                                   --
   Total stock-based compensation expense, net of income
    taxes, that would have been included in the
    determination of net income if the fair value method
    had been applied to all grants                                     (160,836)
-------------------------------------------------------------------------------
Pro forma net income                                          $       7,619,990
Net income per common share, as reported:
   Basic                                                      $            1.54
   Diluted                                                                 1.54
-------------------------------------------------------------------------------
Pro forma net income per common share:
   Basic                                                      $            1.51
   Diluted                                                                 1.51
-------------------------------------------------------------------------------

Net income per common share

Basic net income per common share is based on the weighted average number of
common shares actually outstanding. Diluted net income per share is calculated
by adjusting the weighted average number of shares of common stock outstanding
to include the effect of stock options, if dilutive, using the treasury stock
method.

22

<PAGE>

--------------------------------------------------------------------------------

Reclassification

Certain amounts for prior periods have been reclassified to conform to the
current period's presentation.

2.  SECURITIES AVAILABLE FOR SALE

<TABLE>
<CAPTION>
                                                              December 31, 2002
----------------------------------------------------------------------------------------------------
                                                              Gross Unrealized
                                           Amortized     ---------------------------     Carrying
                                             Cost            Gains         Losses          Value
----------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>            <C>
Mortgage-backed securities               $   2,189,845   $     58,207   $         --   $   2,248,052
Mutual funds                                 1,441,917            400             --       1,442,317
Trust originated preferred security,
 maturing after twenty years                   500,000         25,000             --         525,000
Equity security                                  7,020        320,139             --         327,159
----------------------------------------------------------------------------------------------------
                                         $   4,138,782   $    403,746   $         --   $   4,542,528
====================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                              December 31, 2003
----------------------------------------------------------------------------------------------------
                                                               Gross Unrealized
                                           Amortized     ---------------------------      Carrying
                                             Cost            Gains         Losses          Value
----------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>            <C>
Mortgage-backed securities               $   1,536,503   $     25,546   $         --   $   1,562,049
Mutual funds                                 1,473,609             --          9,832       1,463,777
Trust originated preferred security,
 maturing after twenty years                   500,000         40,000             --         540,000
Equity security                                  7,020        349,056             --         356,076
----------------------------------------------------------------------------------------------------
                                         $   3,517,132   $    414,602   $      9,832   $   3,921,902
====================================================================================================
</TABLE>

There were no sales of investment securities available for sale during the years
ended December 31, 2001, 2002 and 2003.

                                                                              23

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

--------------------------------------------------------------------------------

3.  INVESTMENT SECURITIES HELD TO MATURITY

<TABLE>
<CAPTION>

                                                              December 31, 2002
----------------------------------------------------------------------------------------------------
                                                               Gross Unrealized
                                           Amortized     ---------------------------     Estimated
                                             Cost            Gains         Losses       Fair Value
----------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>            <C>
Subordinated notes due after five
 through ten years                       $   7,095,209   $    365,801   $         --   $   7,461,010
====================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                              December 31, 2003
----------------------------------------------------------------------------------------------------
                                                               Gross Unrealized
                                           Amortized     ---------------------------     Estimated
                                             Cost            Gains         Losses       Fair Value
----------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>            <C>
Subordinated notes due after five
 through ten years                       $   9,422,111   $    527,889   $         --   $   9,950,000
====================================================================================================
</TABLE>

There were no sales of investment securities held to maturity during the years
ended December 31, 2001, 2002 and 2003.

24

<PAGE>

--------------------------------------------------------------------------------
4.  MORTGAGE-BACKED SECURITIES HELD TO MATURITY

<TABLE>
<CAPTION>
                                                              December 31, 2002
----------------------------------------------------------------------------------------------------
                                                               Gross Unrealized
                                           Amortized     ---------------------------     Estimated
                                             Cost            Gains         Losses       Fair Value
----------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>            <C>
Federal Home Loan Mortgage Corporation   $  98,734,189   $  3,871,401   $         --   $ 102,605,590
Federal National Mortgage Association       38,481,631      1,718,481          1,385      40,198,727
Government National Mortgage
 Association                                 1,217,349         91,901             --       1,309,250
Collateralized Mortgage Obligations          7,705,157        153,372             --       7,858,529
----------------------------------------------------------------------------------------------------
                                         $ 146,138,326   $  5,835,155   $      1,385   $ 151,972,096
====================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                              December 31, 2003
----------------------------------------------------------------------------------------------------
                                                               Gross Unrealized
                                           Amortized     ---------------------------     Estimated
                                             Cost            Gains         Losses       Fair Value
----------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>            <C>
Federal Home Loan Mortgage Corporation   $ 147,045,961   $  1,711,309   $    906,034   $ 147,851,236
Federal National Mortgage Association       55,604,882        717,259        750,040      55,572,101
Government National Mortgage
 Association                                   681,932         54,875             --         736,807
Collateralized Mortgage Obligations         15,085,565             43        211,036      14,874,572
----------------------------------------------------------------------------------------------------
                                         $ 218,418,340   $  2,483,486   $  1,867,110   $ 219,034,716
====================================================================================================
</TABLE>

There were no sales of mortgage-backed securities held to maturity during the
years ended December 31, 2001, 2002 and 2003.

                                                                              25

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

5. LOAN RECEIVABLE

                                           December 31,
--------------------------------------------------------------
                                     2002             2003
--------------------------------------------------------------
Real estate mortgage:
   One-to-four family            $ 253,972,105   $ 228,458,746
   Multi-family                     37,069,398      40,538,648
   Commercial                       31,624,172      41,168,523
   FHA insured and
    VA guaranteed                      186,109          75,047
--------------------------------------------------------------
                                   322,851,784     310,240,964
--------------------------------------------------------------
Real estate construction             6,519,779      11,225,286
--------------------------------------------------------------
Land                                 1,372,803       1,373,985
--------------------------------------------------------------
Commercial                             658,216         406,733
--------------------------------------------------------------
Consumer:
   Passbook or certificate             552,252         585,733
   Home improvement                    336,268         229,153
   Equity and second
    mortgage                        59,233,431      59,757,904
   Automobile                        1,243,333         734,138
   Personal                          1,297,740       1,144,480
--------------------------------------------------------------
                                    62,663,024      62,451,408
--------------------------------------------------------------
   Total                           394,065,606     385,698,376
--------------------------------------------------------------
Less:
   Loans in process                  1,882,044       5,168,432
   Allowance for loan losses         2,550,000       2,515,000
   Deferred loan fees
    (costs) and discounts             (231,142)       (625,829)
--------------------------------------------------------------
                                     4,200,902       7,057,603
--------------------------------------------------------------
                                 $ 389,864,704   $ 378,640,773
--------------------------------------------------------------

At December 31, 2001, 2002 and 2003, loans serviced by the Bank for the benefit
of others totalled approximately $1,584,000, $1,104,000 and $665,000,
respectively.

At December 31, 2001, 2002 and 2003, nonaccrual loans for which interest has
been discontinued totalled approximately $2,256,000, $1,485,000, and $809,000,
respectively. During the years ended December 31, 2001, 2002 and 2003, the Bank
recognized interest income of approximately $88,000, $24,000, and $35,000,
respectively, on these loans. Interest income that would have been recorded, had
the loans been on the accrual status, would have amounted to approximately
$230,000, $151,000, and $79,000 for the years ended December 31, 2001, 2002 and
2003, respectively. The Bank is not committed to lend additional funds to the
borrowers whose loans have been placed on nonaccrual status.

The following is an analysis of the allowance for loan losses:

                                             Year Ended December 31,
------------------------------------------------------------------------------
                                      2001            2002            2003
------------------------------------------------------------------------------
Balance, beginning               $   1,950,000   $   2,150,000   $   2,550,000
Provisions charged
 to operations                         458,888         634,090          83,777
Recoveries credited
 to allowance                           14,432          10,346           7,512
Loan losses charged
 to allowance                         (273,320)       (244,436)       (126,289)
------------------------------------------------------------------------------
Balance, ending                  $   2,150,000   $   2,550,000   $   2,515,000
------------------------------------------------------------------------------
Impaired loans and related amounts recorded in the allowance for loan losses are
summarized as follows:

------------------------------------------------------------------------
                                                    December 31,
------------------------------------------------------------------------
                                                2002           2003
------------------------------------------------------------------------
Recorded investment in impaired loans:
   With recorded allowances                 $      32,959  $     458,730
   Without recorded allowances                  1,566,438        767,984
------------------------------------------------------------------------
      Total impaired loans                      1,599,397      1,226,714
      Related allowance for loan losses            32,959        173,730
------------------------------------------------------------------------
      Net impaired loans                    $   1,566,438  $   1,052,984
------------------------------------------------------------------------

The activity with respect to loans to directors, officers and associates of such
persons is as follows:

                                  Year Ended
                                 December 31,
----------------------------------------------
                                      2003
----------------------------------------------
Balance, beginning               $   2,109,537
Loans originated                     1,059,828
Collection of principal             (1,083,212)
----------------------------------------------
Balance, ending                  $   2,086,153
----------------------------------------------

26

<PAGE>

6. PREMISES AND EQUIPMENT

                                          December 31,
--------------------------------------------------------------
                                     2002             2003
--------------------------------------------------------------
Land                             $     701,625   $     701,625
--------------------------------------------------------------
Buildings and improvements           4,027,388       4,027,388
Less accumulated depreciation        1,817,150       1,945,466
--------------------------------------------------------------
                                     2,210,238       2,081,922
--------------------------------------------------------------
Leasehold improvements               1,190,690       1,190,690
Less accumulated amortization          516,257         636,066
--------------------------------------------------------------
                                       674,433         554,624
--------------------------------------------------------------
Furnishings and equipment            5,693,398       5,909,523
Less accumulated depreciation        4,862,455       5,155,011
--------------------------------------------------------------
                                       830,943         754,512
--------------------------------------------------------------
                                 $   4,417,239   $   4,092,683
--------------------------------------------------------------

Depreciation expense for the years ended December 31, 2001, 2002, and 2003
totalled approximately $571,000, $606,000, and $550,000, respectively.

Depreciation charges are computed on the straight-line method over the
following estimated useful lives:

------------------------------------------------------
Buildings and improvements              10 to 50 years
Leasehold improvements                  10 years
Furnishings and equipment               3 to 10 years

7. INTEREST RECEIVABLE

                                         December 31,
--------------------------------------------------------------
                                      2002           2003
--------------------------------------------------------------
Loans, net of allowance for
 uncollected interest of
 approximately $130,000 and
 $55,000, respectively           $   2,078,868   $   1,737,368
Mortgage-backed securities             756,356         926,421
Investment securities                  147,091         174,708
--------------------------------------------------------------
                                 $   2,982,315   $   2,838,497
--------------------------------------------------------------

                                                                              27

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

--------------------------------------------------------------------------------

8.  DEPOSITS

<TABLE>
<CAPTION>
                                                                    December 31,
------------------------------------------------------------------------------------------------------------------
                                                   2002                                     2003
------------------------------------------------------------------------------------------------------------------
                                   Weighted                                  Weighted
                                    Average                                   Average
                                       Rate          Amount      Percent         Rate          Amount      Percent
------------------------------------------------------------------------------------------------------------------
<S>                                <C>        <C>                <C>         <C>        <C>                <C>
Demand:
   Non-interest-bearing demand         0.00%  $  26,313,782         5.91         0.00%  $  30,254,587         6.15
   NOW                                 1.26%     33,200,162         7.45         1.00%     41,592,334         8.45
------------------------------------------------------------------------------------------------------------------
                                       0.70%     59,513,944        13.36         0.58%     71,846,921        14.60
Money Market                           2.11%     32,594,320         7.31         1.33%     38,495,382         7.82
Savings and club                       2.34%    155,430,932        34.89         1.35%    179,463,134        36.46
Certificates of deposit                3.18%    197,968,219        44.44         2.39%    202,355,328        41.12
------------------------------------------------------------------------------------------------------------------
                                       2.48%  $ 445,507,415       100.00         1.66%  $ 492,160,765       100.00
------------------------------------------------------------------------------------------------------------------
</TABLE>

The scheduled maturities of certificates of deposit are as follows (in
thousands):

                                          December 31,
-------------------------------------------------------------
Maturity Period                       2002           2003
-------------------------------------------------------------
One year or less                  $    164,187   $    175,898
After one to three years                30,150         21,661
After three years                        3,631          4,796
-------------------------------------------------------------
                                  $    197,968   $    202,355
-------------------------------------------------------------

Certificates of deposit of $100,000 or more by the time remaining until maturity
are as follows (in thousands):

                                          December 31,
-------------------------------------------------------------
Maturity Period                       2002           2003
-------------------------------------------------------------
Three months or less              $     11,880   $     12,239
After three through six months          12,107         11,612
After six through twelve months         24,510         32,538
After twelve months                      9,346          9,134
-------------------------------------------------------------
                                  $     57,843   $     65,523
-------------------------------------------------------------

A summary of interest on deposits follows:

                                            Year Ended December 31,
                                      2001           2002           2003
----------------------------------------------------------------------------
Demand                            $  1,147,870   $  1,080,086   $  1,029,530
Savings and club                     3,281,412      3,428,455      3,118,465
Certificates
 of deposit                         10,490,771      6,983,647      5,550,866
----------------------------------------------------------------------------
                                    14,920,053     11,492,188      9,698,861
Less penalties for early
 withdrawal of certificates of
 deposit                               (11,143)        (9,528)        (7,340)
----------------------------------------------------------------------------
                                  $ 14,908,910   $ 11,482,660   $  9,691,521
----------------------------------------------------------------------------

28

<PAGE>

9.  ADVANCES FROM FEDERAL HOME LOAN BANK OF NEW YORK

                                  December 31,
----------------------------------------------------------------
                         2002                     2003
----------------------------------------------------------------
               Weighted                  Weighted
Maturing        Average                   Average
by             Interest                  Interest
December 31,       Rate         Amount       Rate         Amount
----------------------------------------------------------------
2003               5.50%  $ 27,340,000         --%  $         --
2004               3.49%    12,000,000       2.80%    17,000,000
2005               3.98%    13,000,000       3.21%    20,000,000
2006               4.47%    12,000,000       3.35%    25,000,000
2007               3.50%     3,000,000       2.75%     8,000,000
2008               4.85%     7,000,000       4.85%     7,000,000
2010               6.19%    10,000,000       6.19%    10,000,000
----------------------------------------------------------------
                   4.79%  $ 84,340,000       3.60%  $ 87,000,000
----------------------------------------------------------------

At December 31, 2002 and 2003, the advances were secured by pledges of the
Bank's investment in the capital stock of the Federal Home Loan Bank of New York
totalling $4,403,400, and $4,743,900 respectively, and a blanket assignment of
the Bank's unpledged qualifying mortgage loans, mortgage-backed securities and
investment securities portfolios.

At December 31, 2002 and 2003, the Company also had available to it $27,525,700
and $30,223,900, respectively, under a revolving overnight line of credit,
expiring August 22, 2003 and August 24, 2004, respectively, with the Federal
Home Loan Bank of New York. Borrowings are at the lenders cost of funds plus
..25%. There were no outstanding borrowings under the line of credit at December
31, 2002 and 2003.

10. OTHER BORROWED MONEY

                                 December 31,
----------------------------------------------------------------
                         2002                     2003
----------------------------------------------------------------
                Interest                 Interest
                    Rate        Amount       Rate         Amount
----------------------------------------------------------------
Mortgage loan       8.00%  $   149,166       8.00%  $    117,748
----------------------------------------------------------------

The mortgage loan is payable in 144 equal monthly installments of $3,518 through
February 1, 2007 and is secured by premises with a carrying value of $1,340,000
and $1,310,000 at December 31, 2002 and 2003, respectively.

11. REGULATORY CAPITAL

For the purpose of granting to eligible account holders a priority in the event
of future liquidation, the Bank, at the time of conversion, established a
special account in an amount equal to its total retained earnings of $18.4
million at June 30, 1989. In the event of a future liquidation of the converted
Bank (and only in such event), an eligible account holder who continues to
maintain his deposit account shall be entitled to receive a distribution from
the special account. The total amount of the special account is decreased (but
never increased) in an amount proportionately corresponding to decreases in the
deposit account balances of eligible account holders as of each subsequent year
end. After conversion, no dividends may be paid to stockholders if such
dividends would reduce the retained earnings of the converted Bank below the
amount required by the special account.

The Bank is subject to various regulatory capital requirements administered by
the banking agencies. Failure to meet minimum capital requirements can initiate
certain mandatory, and possibly additional discretionary, actions by regulators
that, if undertaken, could have a direct material effect on the Bank. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain off-balance-sheet items
as calculated under regulatory accounting practices. The Bank's capital amounts
and classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios of Total and Tier 1
capital (as defined in the regulations) to risk-weighted assets (as defined),
and of Tier 1 capital to adjusted total assets (as defined). The following
tables present a reconciliation of capital per GAAP and regulatory capital and
information as to the Bank's capital levels at the dates presented:

                                            December 31,
----------------------------------------------------------------
                                         2002           2003
----------------------------------------------------------------
GAAP capital                         $     43,757   $     46,774
Less: Investment in and advances
 to non-includable subsidiary              (2,040)          (365)
   Unrealized (gain) on securities
    available for sale                       (243)          (243)
----------------------------------------------------------------
Core and tangible capital                  41,474         46,166
Add: general valuation allowance            2,517          2,341
----------------------------------------------------------------
   Total regulatory capital          $     43,991   $     48,507
----------------------------------------------------------------

                                                                              29

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                         To Be Well
                                                                      Capitalized Under
                                                    Minimum Capital   Prompt Corrective
(Dollars in Thousands)               Actual          Requirements     Action Provisions
---------------------------------------------------------------------------------------
                                  Amount   Ratio     Amount   Ratio     Amount   Ratio
---------------------------------------------------------------------------------------
December 31, 2002:
---------------------------------------------------------------------------------------
<S>                             <C>        <C>     <C>        <C>     <C>        <C>
Total Capital
   (to risk-weighted assets)    $ 43,991   14.35%  $ 24,518    8.00%  $ 30,648    10.00%
Tier 1 Capital
   (to risk-weighted assets)      41,474   13.53%        --      --     18,389     6.00%
Core (Tier 1) Capital
   (to adjusted total assets)     41,474    7.08%    23,440    4.00%    29,300     5.00%
Tangible Capital
   (to adjusted total assets)     41,474    7.08%     8,790    1.50%        --       --

December 31, 2003:
---------------------------------------------------------------------------------------
Total Capital
   (to risk-weighted assets)    $ 48,507   15.13%  $ 25,645    8.00%  $ 32,057    10.00%
Tier 1 Capital
   (to risk-weighted assets)      46,166   14.40%        --      --     19,234     6.00%
Core (Tier 1) Capital
   (to adjusted total assets)     46,166    7.26%    25,451    4.00%    31,814     5.00%
Tangible Capital
   (to adjusted total assets)     46,166    7.26%     9,544    1.50%        --       --
</TABLE>

As of January 27, 2003, the most recent notification from the State of New
Jersey Department of Banking and Insurance, the Bank was categorized as well
capitalized under the regulatory framework for prompt corrective action. There
are no conditions existing or events which have occurred since notification that
management believes have changed the institution's category.

30

<PAGE>

--------------------------------------------------------------------------------

12. BENEFIT PLANS

Pension Plan ("Plan")

The Bank has a non-contributory defined benefit pension plan covering all
eligible employees. The benefits are based on years of service and employees'
compensation. The Bank's funding policy is to contribute the maximum amount that
can be deducted for federal income tax purposes. The Plan's assets consist
primarily of mutual funds and bank deposits.

The following tables set forth the Plan's funded status and components of net
periodic pension cost:

                                                   December 31,
----------------------------------------------------------------------
                                               2002           2003
----------------------------------------------------------------------
Change in Benefit Obligation
Benefit obligation at beginning of year    $  4,470,707   $  5,670,347
Service cost                                    230,791        256,339
Interest cost                                   336,367        371,695
Actuarial loss                                  752,164        542,283
Benefits paid                                  (119,682)      (120,980)
----------------------------------------------------------------------
Benefit obligation at end of year          $  5,670,347   $  6,719,684
----------------------------------------------------------------------
Change in Plan Assets
Fair value of assets at beginning
 of year                                   $  3,408,608   $  5,444,022
   Actual (loss) gain on plan assets           (181,718)       274,184
   Employer contributions                     2,336,814        329,308
   Benefits paid                               (119,682)      (120,980)
----------------------------------------------------------------------
Fair value of assets at end of year        $  5,444,022   $  5,926,534
----------------------------------------------------------------------

                                                   December 31,
----------------------------------------------------------------------
                                               2002           2003
----------------------------------------------------------------------
Reconciliation of Funded Status
Accumulated benefit obligation             $  4,918,612   $  5,771,037
----------------------------------------------------------------------
Projected benefit obligation               $  5,670,347   $  6,719,684
Fair value of assets                         (5,444,022)    (5,926,534)
----------------------------------------------------------------------
Funded status                                   226,325        793,150
Unrecognized net (loss)                      (2,295,871)    (2,818,291)
Unrecognized past service liability            (161,550)      (143,778)
----------------------------------------------------------------------
(Prepaid) expense included in
 other assets                              $ (2,231,096)  $ (2,168,919)
----------------------------------------------------------------------
Assumption Used
Discount rate                                     6.625%          6.25%
Rate of increase in compensation                   4.00%          3.50%

<TABLE>
<CAPTION>
                                                    Year Ended December 31,
-------------------------------------------------------------------------------------
                                               2001           2002           2003
-------------------------------------------------------------------------------------
<S>                                        <C>            <C>            <C>
Net Periodic Pension Expense
Service cost                               $    192,887   $    230,791   $    256,339
Interest cost                                   296,009        336,367        371,695
Expected return on assets                      (297,851)      (338,524)      (430,733)
Amortization of unrecognized loss                 1,256         68,393        176,412
Unrecognized past service liability                  --         13,329         17,772
-------------------------------------------------------------------------------------
Net periodic pension expense               $    192,301   $    310,356   $    391,485
-------------------------------------------------------------------------------------
Assumptions
Discount rate                                      8.00%          7.25%         6.625%
Rate of increase in compensation                   5.00%          4.50%          4.00%
Long-term rate of return on plan assets            8.50%          8.50%          8.00%
</TABLE>

Plan assets

For 2003, the plan's assets realized an annual return of 5%. The
weighted-average allocation by asset category are as follows:

                                       December 31,
----------------------------------------------------
                                      2002     2003
----------------------------------------------------
Certificates of deposit                 63%       37%
Mutual fund shares                      20%       29%
Mortgage-backed securities               5%        9%
Equity securities                       12%       25%
----------------------------------------------------
                                       100%      100%
----------------------------------------------------

For 2004, the Company intends to maintain the current asset mix and seek to
achieve an optimal risk/reward profile by limiting market exposure to present
levels. Based on an analysis of the current market environment, we project a
2.5% return from cash, a 5% return from fixed income and a 10% return from
equities, for an overall expected return of approximately 6.50%.

The long-term rate-of-return-on-assets assumption is set based on historical
returns earned by equities and fixed income securities, adjusted to reflect
expectations of future returns as applied to the Plan's actual target allocation
of asset classes. Equities and fixed income securities are assumed to earn real
rates of return in the ranges of 5-9% and 2-6%, respectively. Additionally, the
long-term inflation rate is projected to be 3%. When these overall return
expectations are applied to a typical Plan's target allocation, the result is an
expected return of 8% to 10%.

Equity securities include Pamrapo Bancorp, Inc. common stock in the amounts of
$442,000 (8% of total plan assets) and $659,000 (11% of total plan assets) at
December 31, 2002 and 2003, respectively.

                                                                              31

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

Contributions

The Company expects to contribute approximately $439,000 to the pension plan in
2004.

Savings and Investment Plan ("SIP")

The Bank sponsors a SIP pursuant to Section 401(k) of the Internal Revenue Code,
for all eligible employees. Employees may elect to save up to 10% of their
compensation of which the Savings Bank will match 50% of the employee's
contribution. The SIP expense amounted to approximately, $106,000, $124,000 and
$120,000 for the years ended December 31, 2001, 2002 and 2003, respectively.

Supplemental Executive Retirement Plan ("SERP")

The Bank has an unfunded non-qualified deferred retirement plan for certain
employees. A participant who retires at age 65 (the "Normal Retirement Age"), is
entitled to an annual retirement benefit equal to 75% of his compensation
reduced by his retirement plan annual benefits. Participants retiring before the
Normal Retirement Age receive the same benefits reduced by a percentage based on
years of service to the Bank and the number of years prior to the Normal
Retirement Age that participant retires.

The following tables set forth the SERP's funded status and components of net
periodic SERP cost:

                                                   December 31,
----------------------------------------------------------------------
                                                2002          2003
----------------------------------------------------------------------
Projected benefit obligation at
 beginning of year                         $  2,596,758   $  2,790,762
Service cost                                    (11,265)            --
Interest cost                                   177,653        181,629
Actuarial loss (gain)                           345,576        (62,263)
Benefit payments                                (33,456)      (163,312)
Termination benefits                                 --         92,740
Plan amendment                                 (284,504)            --
----------------------------------------------------------------------
Projected benefit obligation
 at end of year                               2,790,762      2,839,556
Plan assets at fair value                            --             --
----------------------------------------------------------------------
Projected benefit obligation in excess
 of plan assets                               2,790,762      2,839,556
Unrecognized net loss                          (895,743)      (753,092)
Benefit paid in fourth quarter                  (64,928)       (13,631)
Unrecognized past service liability            (588,702)      (493,484)
----------------------------------------------------------------------
Accrued SERP cost included in other
 liabilities                               $  1,241,389   $  1,579,349
----------------------------------------------------------------------
Assumptions:
   Discount rate                                  6.625%          6.25%
   Rate of increase in compensation                4.00%          3.50%

Net periodic SERP cost includes the following components:

<TABLE>
<CAPTION>
                                                    Year Ended December 31,
-------------------------------------------------------------------------------------
                                               2001           2002           2003
-------------------------------------------------------------------------------------
<S>                                        <C>            <C>            <C>
Service cost                               $         --   $    (11,265)  $         --
Interest cost                                   173,378        177,653        181,629
Net amortization                                150,029        184,636        173,975
Special termination benefits                         --             --         92,740
-------------------------------------------------------------------------------------
Net periodic SERP cost                     $    323,407   $    351,024   $    448,344
-------------------------------------------------------------------------------------
Contributions made                         $    121,497   $    163,312   $    110,384
-------------------------------------------------------------------------------------
Assumptions:
   Discount rate                                   8.00%          7.25%         6.625%
   Rate of increase in compensation                5.50%          4.50%          4.00%
   Amortization period in years                    6.37           4.94           7.83
</TABLE>

32

<PAGE>

Stock Options

Stock options granted under a stockholder approved stock option plan may be
either options that qualify as incentive stock options as defined in Section 422
of the Internal Revenue Code of 1986, as amended, or non-statutory options. All
options are vested at the grant date and may be exercised up to ten years from
the date of grant. All options granted will be exercisable in the event the
optionee terminates his employment, or due to death or disability. A summary of
stock option activity follows:

                                                       Weighted
                           Number         Range        Average
                         of Option    of Exercise      Exercise
                           Shares         Price         Price
-----------------------------------------------------------------
December 31, 2002                --   $         --   $         --
   Options granted           87,000          18.41          18.41
   Options exercised         (3,000)         18.41          18.41
-----------------------------------------------------------------
December 31, 2003            84,000          18.41          18.41
-----------------------------------------------------------------
Exercisable at:
   December 31, 2003         84,000          18.41          18.41
-----------------------------------------------------------------

At December 31, 2003, the weighted average remaining contractual life of the
stock options granted was approximately 9.5 years and stock options for up to
67,380 additional shares of common stock were available for future grants. No
options were forfeited during 2003.

The Company, as permitted by Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting standards ("SFAS") No. 123, recognizes
compensation cost for stock options granted based on the intrinsic value method
instead of the fair value based method. The grant-date fair values of the stock
options granted during 2003, which have exercise prices equal to the market
price of the common stock at the grant date, were estimated using the
Black-Scholes option-pricing model. Such fair value and the assumptions used for
estimating fair value are as follows:

                                        Year Ended
                                       December 31,
                                           2003
---------------------------------------------------
Grant-date fair value per share        $       3.08
Expected common stock dividend yield           4.35%
Expected option life                      7.0 years
Risk-free interest rate                        2.78%
Volatility                                    25.61%
---------------------------------------------------

13. INCOME TAXES

The Bank qualifies as a savings institution under the provisions of the Internal
Revenue Code and was therefore, prior to January 1, 1996, permitted to deduct
from taxable income an allowance for bad debts based upon eight percent of
taxable income before such deduction, less certain adjustments. Retained
earnings at December 31, 2003, include approximately $6,907,000 of such bad
debt, which, in accordance with SFAS No. 109, "Accounting for Income Taxes," is
considered a permanent difference between the book and income tax basis of loans
receivable, and for which income taxes have not been provided. If such amount is
used for purposes other than for bad debt losses, including distributions in
liquidation, it will be subject to income tax at the then current rate.

The tax effect of existing temporary differences which give rise to significant
portions of deferred tax assets and deferred tax liabilities are as follows:

                                  December 31,
-------------------------------------------------------
                                2002           2003
-------------------------------------------------------
Deferred tax assets
-------------------
Allowance for losses        $  1,044,130   $  1,030,950
Deferred loan fees               130,326         86,177
Depreciation                      98,391         90,223
Reserve for uncollected
 interest                         43,677         21,877
-------------------------------------------------------
                               1,316,524      1,229,227
-------------------------------------------------------
Deferred tax liabilities
------------------------
Benefit plans                    375,930        224,084
Unrealized gain on
 securities available
 for sale                        161,200        161,600
-------------------------------------------------------
                                 537,130        385,684
-------------------------------------------------------
Net deferred tax assets     $    779,394   $    843,543
-------------------------------------------------------

The components of income taxes are summarized as follows:

                                 Year Ended December 31,
-------------------------------------------------------------------
                             2001           2002           2003
-------------------------------------------------------------------
Current tax expense:
   Federal               $  2,501,025   $  3,376,150   $  4,039,901
   State                      433,274      1,019,074      1,227,493
-------------------------------------------------------------------
                            2,934,299      4,395,224      5,267,394
-------------------------------------------------------------------
Deferred tax
 (benefit) expense:
   Federal                    (24,347)       496,539        (48,838)
   State                       (1,972)      (105,531)       (15,711)
-------------------------------------------------------------------
                              (26,319)       391,008        (64,549)
-------------------------------------------------------------------
                         $  2,907,980   $  4,786,232   $  5,202,845
-------------------------------------------------------------------

                                                                              33

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

The following table presents a reconciliation between the reported income taxes
and the income taxes which would be computed by applying the normal federal
income tax rate of 34% to income before income taxes:

                                 Year Ended December 31,
--------------------------------------------------------------------
                              2001           2002           2003
--------------------------------------------------------------------
Federal income tax        $  2,688,850   $  4,049,272   $  4,414,448
Increases in income
 taxes resulting
 from:
   New Jersey income
    tax, net of federal
    income tax effect          168,315        603,430        799,776
   Other items, net             50,815        133,530        (11,379)
--------------------------------------------------------------------
Effective income tax      $  2,907,980   $  4,786,232   $  5,202,845
--------------------------------------------------------------------

14. COMMITMENTS AND CONTINGENCIES

The Bank is party to financial instruments with off-balance sheet risk in the
normal course of business primarily to meet the financing needs of its
customers. These financial instruments include commitments to originate loans
and purchase securities. The commitments involve, to varying degrees, elements
of credit and interest rate risk in excess of the amount recognized in the
consolidated statement of financial condition. The Bank's exposure to credit
loss in the event of nonperformance by the other party to the financial
instrument for commitments to extend credit is represented by the contractual
notional amount of those instruments. The Bank uses the same credit policies in
making commitments as it does for on-balance sheet instruments.

Commitments to originate loans are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since commitments may expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The Savings Bank evaluates each customer's creditworthiness on a
case-by-case basis. The amount of collateral obtained, if deemed necessary by
the Bank, upon extension of credit is based on management's credit evaluation of
the counterparty. Collateral held varies but primarily includes residential real
estate and income-producing commercial properties.

The Bank had loan commitments outstanding as follows:

                                December 31,
-------------------------------------------------
                          2002           2003
-------------------------------------------------
To originate loans   $  18,415,000   $ 19,652,000
-------------------------------------------------

At December 31, 2003, all the outstanding commitments to originate loans are at
fixed interest rates which range from 5.50% to 8.25%. All commitments are due to
expire within ninety days.

At December 31, 2003, undisbursed funds from approved lines of credit under a
homeowners' equity and a commercial equity lending program amounted to
approximately $8,949,000 and $1,004,000, respectively. Unless they are
specifically cancelled by notice from the Bank, these funds represent firm
commitments available to the respective borrowers on demand. The interest rates
charged for any month on funds disbursed under these programs range from 0% to
4.25% above the prime rate.

Rental expenses related to the occupancy of premises totalled $312,000, $272,000
and $248,000 for the years ended December 31, 2001, 2002 and 2003, respectively.
At December 31, 2003, minimum non-cancellable obligations under lease agreements
with original terms of more than one year are as follows:

December 31,       Amount
----------------------------
2004            $    205,000
2005                 207,000
2006                 211,000
2007                 141,000
2008                  90,000
Thereafter           377,000
----------------------------
                $  1,231,000
----------------------------

The Bank is also a party to litigation which arises primarily in the ordinary
course of business. In the opinion of management, the ultimate disposition of
such litigation should not have a material effect on the consolidated financial
position of the Company.

34

<PAGE>

15. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts and fair value of the financial instruments are as follows
(in thousands):

                                               December 31,
-------------------------------------------------------------------------------
                                       2002                      2003
-------------------------------------------------------------------------------
                              Carrying                  Carrying
                                Value     Fair Value      Value     Fair Value
-------------------------------------------------------------------------------
Financial Assets
-------------------------------------------------------------------------------
Cash and cash equivalents    $    23,857  $    23,857  $    10,126  $    10,126
Securities available for
 sale                              4,543        4,543        3,922        3,922
Investment securities held
 to maturity                       7,095        7,461        9,422        9,950
Mortgage-backed securities
 held to maturity                146,138      151,972      218,418      219,035
Loans receivable                 389,865      400,548      378,641      388,649
Interest receivable                2,982        2,982        2,838        2,838

Financial Liabilities
-------------------------------------------------------------------------------
Deposits                         445,507      446,626      492,161      492,948
Advances and other borrowed
 money                            84,489       88,896       87,118       89,741

Commitments
-------------------------------------------------------------------------------
To originate loans                18,415       18,415       19,652       19,652
Unused lines of credit            10,143       10,143        9,953        9,953

                                                                              35

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

The fair value estimates are made at a discrete point in time based on relevant
market information and information about the financial instruments. Fair value
estimates are based on judgments regarding future expected loss experience,
current economic conditions, risk characteristics of various financial
instruments and other factors. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and, therefore, cannot
be determined with precision. Changes in assumptions could significantly affect
the estimates. Further, the foregoing estimates may not reflect the actual
amount that could be realized if all or substantially all of the financial
instruments were offered for sale.

In addition, the fair value estimates were based on existing on-and-off balance
sheet financial instruments without attempting to value anticipated future
business and the value of assets and liabilities that are not considered
financial instruments. Other significant assets and liabilities that are not
considered financial assets and liabilities include mortgage servicing rights,
premises and equipment and advances from borrowers for taxes and insurance. In
addition, the tax ramifications related to the realization of the unrealized
gains and losses can have a significant effect on fair value estimates and have
not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be
likely due to the wide range of permitted valuation techniques and numerous
estimates which must be made given the absence of active secondary markets for
many of the financial instruments. This lack of uniform valuation methodologies
introduces a greater degree of subjectivity to these estimated fair values.

16. PARENT COMPANY FINANCIAL INFORMATION

The following condensed financial statements of the Company should be read in
conjunction with the Notes to Consolidated Financial Statements.

STATEMENTS OF FINANCIAL CONDITION
                                    December 31,
-------------------------------------------------------
Assets                          2002           2003
-------------------------------------------------------
Cash and cash equivalents   $  6,812,987   $  4,289,428
Investment in subsidiary      43,757,083     46,774,417
Refundable income taxes          120,965        121,490
Other assets                     178,328        200,658
-------------------------------------------------------
   Total assets             $ 50,869,363   $ 51,385,993
-------------------------------------------------------
Liabilities and stockholders' equity
-------------------------------------------------------
Liabilities
-------------------------------------------------------
Other liabilities           $    113,090   $     62,650
-------------------------------------------------------
   Total liabilities        $    113,090   $     62,650
-------------------------------------------------------

Stockholders' equity
-------------------------------------------------------
Common stock                      69,000         69,000
Paid-in-capital in excess
 of par value                 18,937,168     18,957,298
Retained earnings -
 substantially restricted     51,131,766     54,865,096
Treasury stock, at cost      (19,381,661)   (22,568,051)
-------------------------------------------------------
   Total stockholders'
    equity                    50,756,273     51,323,343
-------------------------------------------------------
   Total liabilities and
    stockholders' equity    $ 50,869,363   $ 51,385,993
-------------------------------------------------------

36

<PAGE>

STATEMENTS OF INCOME

                                                Year Ended December 31,
-------------------------------------------------------------------------------
                                            2001          2002          2003
-------------------------------------------------------------------------------
Dividends from subsidiary               $ 5,000,000   $ 5,000,000   $ 5,000,000
Interest income                               5,306         5,364         4,208
-------------------------------------------------------------------------------
   Total income                           5,005,306     5,005,364     5,004,208
Expenses                                    470,761       507,798       360,532
-------------------------------------------------------------------------------
Income before equity in undistributed
 earnings of subsidiary and income
 taxes (benefit)                          4,534,545     4,497,566     4,643,676
Equity in undistributed earnings of
 subsidiary                                 354,260     2,505,451     3,016,710
-------------------------------------------------------------------------------
Income before income taxes (benefit)      4,888,805     7,003,017     7,660,386
Income taxes (benefit)                     (111,596)     (120,375)     (120,440)
-------------------------------------------------------------------------------
Net income                              $ 5,000,401   $ 7,123,392   $ 7,780,826
-------------------------------------------------------------------------------

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
-------------------------------------------------------------------------------------------------
                                                           2001           2002           2003
-------------------------------------------------------------------------------------------------
<S>                                                    <C>            <C>            <C>
Cash flows from operating activities:
   Net income                                          $  5,000,401   $  7,123,392   $  7,780,826
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Equity in undistributed earnings of subsidiary       (354,260)    (2,505,451)    (3,016,710)
      (Increase) in refundable income taxes                 (87,119)        (9,129)          (525)
      Decrease (increase) in other assets                     2,193          9,538        (22,330)
      Increase (decrease) in other liabilities               14,196         10,090        (50,440)
      Distribution of treasury stock                             --        197,500             --
-------------------------------------------------------------------------------------------------
         Net cash provided by operating activities        4,575,411      4,825,940      4,690,821
-------------------------------------------------------------------------------------------------
Cash flows from financing activities:
      Cash dividends paid                                (3,711,781)    (3,855,228)    (4,048,120)
      Sale of treasury stock                                     --             --         55,230
      Purchase of treasury stock                           (416,145)      (279,328)    (3,221,490)
-------------------------------------------------------------------------------------------------
         Net cash (used in) financing activities         (4,127,926)    (4,134,556)    (7,214,380)
-------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                   447,485        691,384     (2,523,559)
Cash and cash equivalents - beginning                     5,674,118      6,121,603      6,812,987
-------------------------------------------------------------------------------------------------
Cash and cash equivalents - ending                     $  6,121,603   $  6,812,987   $  4,289,428
-------------------------------------------------------------------------------------------------
</TABLE>

                                                                              37

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

17. QUARTERLY FINANCIAL DATA (UNAUDITED)

(In thousands, except for per
 share amounts)                          First     Second      Third     Fourth
Year Ended December 31, 2002            Quarter    Quarter    Quarter    Quarter
--------------------------------------------------------------------------------
Interest income                        $  9,603   $  9,592   $  9,486   $  9,377
Interest expense                          3,917      3,780      3,812      3,781
--------------------------------------------------------------------------------
   Net interest income                    5,686      5,812      5,674      5,596
Provision for loan losses                   210        225        125         74
Non-interest income                         530        504        943        589
Non-interest expenses                     2,966      3,243      3,257      3,325
Income taxes                              1,109      1,023      1,484      1,170
--------------------------------------------------------------------------------
Net income                             $  1,931   $  1,825   $  1,751   $  1,616
--------------------------------------------------------------------------------
Net income per common share:
   Basic                               $   0.37   $   0.36   $   0.34   $   0.32
   Diluted                             $   0.37   $   0.36   $   0.34   $   0.32
--------------------------------------------------------------------------------
Dividends per common share             $ 0.1875   $ 0.1875   $ 0.1875   $ 0.1875
--------------------------------------------------------------------------------

(In thousands, except for per
 share amounts)                          First     Second      Third     Fourth
Year Ended December 31, 2003            Quarter    Quarter    Quarter    Quarter
--------------------------------------------------------------------------------
Interest income                        $  9,343   $  9,312   $  9,015   $  9,085
Interest expense                          3,623      3,553      3,350      2,907
--------------------------------------------------------------------------------
   Net interest income                    5,720      5,759      5,665      6,178
Provision for loan losses                    30         30         20          4
Non-interest income                         573        667        711        604
Non-interest expenses                     3,156      3,269      3,255      3,129
Income taxes                              1,260      1,263      1,249      1,431
--------------------------------------------------------------------------------
Net income                             $  1,847   $  1,864   $  1,852   $  2,218
--------------------------------------------------------------------------------
Net income per common share:
   Basic                               $   0.36   $   0.36   $   0.37   $   0.45
   Diluted                             $   0.36   $   0.36   $   0.37   $   0.45
--------------------------------------------------------------------------------
Dividends per common share             $   0.20   $   0.20   $   0.20   $   0.20
--------------------------------------------------------------------------------

38

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------

To The Board of Directors and Stockholders

Pamrapo Bancorp, Inc.

We have audited the consolidated statements of financial condition of Pamrapo
Bancorp, Inc. (the "Company") and Subsidiaries as of December 31, 2002 and 2003,
and the related consolidated statements of income, comprehensive income, changes
in stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 2003. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the above mentioned consolidated financial statements present
fairly, in all material respects, the financial position of Pamrapo Bancorp,
Inc. and Subsidiaries as of December 31, 2002 and 2003, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2003, in conformity with accounting principles generally
accepted in the United States of America.


/s/
February 4, 2004
Pine Brook, New Jersey

                                                                              39

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT RESPONSIBILITY STATEMENT
--------------------------------------------------------------------------------

Management of Pamrapo Bancorp, Inc. and Subsidiaries is responsible for the
preparation of the consolidated financial statements and all other consolidated
financial information included in this report. Consolidated financial statements
were prepared in accordance with accounting principles generally accepted in the
United States of America.

All consolidated financial information included in the report agrees with the
consolidated financial statements. In preparing the consolidated financial
statements, management makes informed estimates and judgments with consideration
given to materiality about the expected results of various events and
transactions.

Management maintains a system of internal accounting control that includes
personnel selection, appropriate division of responsibilities, and formal
procedures and policies consistent with high standards of accounting and
administrative practice. Consideration has been given to the necessary balance
between the costs of systems of internal control and the benefits derived.

Management reviews and modifies its systems of accounting and internal control
in light of changes in conditions and operations as well as in response to
recommendations from the independent certified public accountants. Management
believes the accounting and internal control systems provide reasonable
assurance that assets are safeguarded and the consolidated financial information
is reliable.

The Board of Directors is responsible for determining that management fulfills
its responsibilities in the preparation of the consolidated financial statements
and the control of operations. The Board appoints the independent certified
public accountants. The Board meets with management, the independent certified
public accountants, and also the internal auditor, approves the overall scope of
audit work and related fee arrangements, and reviews audit reports and findings.


/s/ William J. Campbell
William J. Campbell
President and Chief Executive Officer


/s/ Kenneth D. Walter
Kenneth D. Walter
Vice President-Treasurer and Chief
Financial Officer


/s/ Robert A. Hughes
Robert A. Hughes
Vice President

February 4, 2004

40

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL CONDITION AND OPERATING DATA OF THE COMPANY
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                         At December 31,
--------------------------------------------------------------------------------------------------
(Dollars in thousands)                 1999         2000         2001         2002         2003
--------------------------------------------------------------------------------------------------
<S>                                 <C>          <C>          <C>          <C>          <C>
Financial condition data:
Total amount of:
Assets                              $  448,020   $  469,558   $  539,639   $  588,659   $  636,895
Loans receivable                       268,280      309,082      369,239      389,865      378,641
Securities available for sale            6,429        5,713        5,304        4,543        3,922
Mortgage-backed securities             120,824      118,791      122,418      146,138      218,418
Investment securities                    7,996        6,996        5,000        7,095        9,422
Deposits                               361,925      379,410      416,587      445,507      492,161
Advances and other borrowed money       30,813       35,788       67,518       84,489       87,118
Stockholders' equity                    48,254       46,529       47,523       50,756       51,323
</TABLE>

<TABLE>
<CAPTION>
                                                        Year Ended December 31,
--------------------------------------------------------------------------------------------------
(Dollars in thousands)                 1999         2000         2001         2002         2003
--------------------------------------------------------------------------------------------------
<S>                                 <C>          <C>          <C>          <C>          <C>
Operating data:
Interest income                     $   31,253   $   33,162   $   36,625   $   38,058   $   36,755
Interest expense                        13,642       15,498       17,544       15,290       13,433
--------------------------------------------------------------------------------------------------
Net interest income                     17,611       17,664       19,081       22,768       23,322
Provision for loan losses                  299          208          459          634           84
Non-interest income                      1,565        1,576        1,921        2,566        2,555
Non-interest expenses                   11,464       11,988       12,635       12,791       12,809
Income taxes                             2,696        2,568        2,908        4,786        5,203
--------------------------------------------------------------------------------------------------
Net income                          $    4,717   $    4,476   $    5,000   $    7,123   $    7,781
Net income per share
   Basic                            $     0.85   $     0.85   $     0.97   $     1.39   $     1.54
   Diluted                                0.85         0.85         0.97         1.39         1.54
--------------------------------------------------------------------------------------------------
Dividends per share                 $     0.63   $     0.69   $     0.72   $     0.75   $     0.80
--------------------------------------------------------------------------------------------------
Dividend payout ratio                    73.35%       80.84%       74.23%       54.12%       52.02%
--------------------------------------------------------------------------------------------------
</TABLE>

                                                                              41

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL CONDITION AND OPERATING DATA OF THE COMPANY
(continued)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                  At or for Year Ended December 31,
--------------------------------------------------------------------------------------------------
                                       1999         2000         2001         2002         2003
--------------------------------------------------------------------------------------------------
<S>                                    <C>          <C>          <C>          <C>          <C>
Selected Financial Ratios:
Return on average assets                  1.09%        0.99%        0.99%        1.26%        1.25%
Return on average equity                  9.66%        9.57%       10.76%       14.52%       15.45%
Average equity/average assets            11.29%       10.30%        9.24%        8.70%        8.08%
Interest rate spread                      3.76%        3.53%        3.48%        3.77%        3.57%
Net yield on average
 interest-earning assets                  4.28%        4.08%        3.95%        4.18%        3.86%
Non-interest expenses to
 average assets                           2.65%        2.64%        2.50%        2.27%        2.06%
Equity/total assets                      10.77%        9.91%        8.81%        8.62%        8.06%
Capital ratios:
   Tangible                               9.30%        8.27%        7.26%        7.08%        7.26%
   Core                                   9.30%        8.27%        7.26%        7.08%        7.26%
   Risk-based                            19.52%       16.29%       14.43%       14.35%       15.13%
Non-performing loans to
 total assets                             0.94%        0.87%        0.60%        0.46%        0.24%
Non-performing loans to
 loans receivable                         1.57%        1.30%        0.88%        0.69%        0.41%
Non-performing assets to
 total assets                             1.03%        1.00%        0.65%        0.49%        0.24%
Allowance for loan losses
 to non-performing loans                 47.62%       47.74%       65.95%       94.41%      161.53%
Average interest-earning
 assets/average interest-bearing
 liabilities                             1.16x        1.15x        1.13x        1.14x        1.13x
Net interest income after
 provision for loan losses
 to non-interest expenses                1.51x        1.46x        1.47x        1.73x        1.81x
</TABLE>

42

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
STOCKHOLDER INFORMATION
--------------------------------------------------------------------------------

MARKET FOR COMMON STOCK AND RELATED MATTERS
Pamrapo Bancorp, Inc.'s common stock is presently quoted on the National
Association of Securities Dealers Automated Quotation's National Market System
under the symbol "PBCI." At March 3, 2004, the Corporation's 4,974,313
outstanding shares of common stock were held by approximately 1,600 persons or
entities.
The following table sets forth the high and low closing sales price per common
share for the periods indicated. Such prices do not necessarily reflect retail
markups, markdowns or commissions.

                                       Closing Prices
                                   ---------------------
Quarter Ended                        High         Low
--------------------------------------------------------
March 31, 2002*                    $  13.80     $  13.00
June 30, 2002                         16.95        13.60
September 30, 2002                    16.64        14.00
December 31, 2002                     17.69        15.99
March 31, 2003                        18.60        16.45
June 30, 2003                         18.55        17.00
September 30, 2003                    23.12        17.70
December 31, 2003                     25.65        20.91

* Prices retroactively adjusted for a two-for-one stock split on May 29, 2002.

Dividends were paid as follows:
-------------------------------------------
March, 2002*                       $  .1875
June, 2002                            .1875
September, 2002                       .1875
December, 2002                        .1875
March, 2003                             .20
June, 2003                              .20
September, 2003                         .20
December, 2003                          .20

* Dividends retroactively adjusted for a two-for-one stock split on May 29,
  2002.

Future dividend policy will be determined by the Board of Directors after giving
consideration to the Company's financial condition, results of operations, tax
status, industry standards, economic conditions and other factors. Dividends
will also depend upon dividend payments by the Bank to the Corporation, which is
its primary source of income. The Board may also consider the payment of stock
dividends from time to time, in addition to, or in lieu of cash dividends.

Under federal regulations, the Bank may not declare or pay a cash dividend on
any of its common stock if the effect thereof would cause the Bank's regulatory
capital to be reduced below the amount required for the liquidation account or
the regulatory capital requirements imposed by the Office of Thrift Supervision
("OTS"). The Bank must provide at least 30 days advance notice to the OTS before
declaring a dividend.

                                                                              43